[Many people] think it means accept failure with dignity and move on. The better, more subtle interpretation is that failure is a manifestation of learning and exploration. If you aren’t experiencing failure, then you are making a far worse mistake: You are being driven by the desire to avoid it. And, for leaders especially, this strategy — trying to avoid failure by out-thinking it — dooms you to fail.

Differentiation between products is driven by the activities of the firm: product design, product performance, quality, branding, advertising, distribution, and so on. The more a product is differentiated along a dimension consumers care about, the higher price premium it can demand. So, Starbucks can charge $3.50 for a cappuccino, Hermès can charge $10,000 for a Birkin bag, and they can do so largely irrespective of input costs.